Custom packaging startup Lumi has raised a $9 million Series A funding round in a push to leverage its network of U.S. factories.

As e-commerce -- which is expected to reach nearly $3 trillion in sales this year globally -- makes up a larger portion of retail sales, businesses that ship direct-to-consumers are looking for simpler, cheaper ways to manage their item packaging and supply chain.

Los Angeles, Calif.-based Lumi, cofounded by Jesse Genet and Stephan Ango, launched three years ago aiming to meet this need. Lumi, which designs and manufactures custom packaging for a range of e-commerce businesses -- especially direct-to-consumer brands built on the internet, such as MeUndies and FabFitFun -- has closed a $9 million Series A funding round, led by Spark Capital (with general partner Kevin Thau), and joined by Forerunner Ventures (with general partner Kirsten Green), and Homebrew (with partner Satya Patel). Lumi’s digital network of more than 1,000 factories, which it connects via its in-house software, has enabled the company to complete more than 18,000 manufactured projects for everything from food to mattresses, cosmetics, medicine, electronics, books and games. To date, Lumi has produced tens of millions of packaging items. Lumi’s manufacturing network helps companies choose the best factory for each job based on cost, quality and production time. Lumi says its factory network enables the startup to manufacture within 50 miles of nearly any distribution center within the U.S.

“Companies can say, ‘I want this packaging,’ and through Lumi, that magically gets routed to the right factory with the right machine with the right capacity,” Spark’s Thau said in an interview, noting that traditionally, a company would need to find a broker representing a few factories to find the best options within a limited subset.

“Lumi looks at a massive number of factories that a single broker could never handle themselves," Thau added. "Lumi takes the complex task of finding factories good at specific parts of packaging and make it super simple -- but in the background, their relationships and technology is hiding the complexity.”

Lumi, which has nearly 30 employees, offers products ranging from custom tape and rubber stamps to services such as sustainable box design and manufacturing, as well as packaging engineering. Ango says the company’s goal is to make “manufacturing as scalable as the web.” Lumi’s service, for example, helps subscription garment site MeUndies quickly change the designs of its shipping pouches based on feedback from social media, according to Genet. Lumi also makes it simpler for subscription box company FabFitFun to work with the small number of manufacturers that can print graphics on its colorful, patterned quarterly boxes.

“Lumi has the data on where that box should be made so it comes out looking correct,” Genet said, noting that Lumi helps companies find the right packaging material, structural design and print process. “A company like FabFitFun is leaning into that data and using Lumi as an ordering platform.”

Courtesy of Lumi

Lumi cofounders Jesse Genet and Stephan Ango.

Lumi makes money exclusively through sales of its packaging products (such as boxes, custom tape, tissue and printed drawstring bags), while offering its project management software for manufacturers and brands (Lumi’s customers) for free. With its new funding, Lumi plans to build out its software tools for manufacturers and brands to make project management more automated and easier to oversee in one place, as well as expand its engineering and supply chain teams.

“Because we rely on so much data, we will naturally be able to spot ways for brands to save or use less material," Genet said. "We’re aggregating demand across hundreds of e-commerce companies, so a brand is getting a rate from Lumi that would be hard for them to get as an individual."

Genet, 30, and Ango, 32, met studying industrial design at Art Center College of Design in Pasadena. Lumi is the duo’s second company. After college, the duo spent four years running an art supply business they started on Kickstarter. At the company, they experienced the often cumbersome process of managing a supply chain first hand. Lumi launched the first version of its site in March 2015, after the startup completed the tech incubator program Y Combinator. In spare time, Genet hosts a YouTube show called “Shipping Things,” and Ango records a podcast called “Well Made” about entrepreneurship and design.

“Packing is naturally important to direct-to-consumer companies, and they’re seeing incredible growth,” Genet said. “From they day they launch their business, outside of their websites, they only have packaging to communicate with their customers.”